Peru Real Estate Industry Update Quarter 3 2012

  • June 2014
  • -
  • Business Monitor International
  • -
  • 65 pages

The Peru Real Estate report examines the Commercial Office, Retail, Industrial and Construction sectors throughout the country in the context of our bullish outlook for the economy and buoyant investor outlook. With a focus on the principal cities of Lima and Arequipa, the report covers the rental industry performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate industry, while minimising investment risk and exploring the impact of strong economic growth and rising demand. The outlook for Peru’s property industry is positive, underpinned by strong economic and segment fundamentals. Construction activity dipped in mid-2011 but has bounced back quickly. BMI projections Real Gross Domestic Product growth of 4.8% in Peru in 2012. Economic growth is largely driven by domestic consumption, business confidence, exports and construction. This sound backdrop provides strong support for property demand.

Key Points:
- Among other partnerships in the region, China, has become Peru’s second largest trading partner for imports and exports, as its appetite for minerals has enabled the country to make significant trade inroads into Latin America. An improved free trade agreement (FTA) between Mexico and Peru has led Mexican entrepreneurs to venture into the Peruvian industry thanks to growing political stability.
- The hotel and tourism segment is expected to benefit from considerable new investment and development in 2012, as tourism arrivals continue to grow.
- Rising domestic concerns over Peru's security situation, as well as social conflict stemming from the country's substantial mining interests will continue to dominate President Ollanta Humala's agenda over the coming year.
- Peruvian growth will be among the strongest in Latin America over the medium term on the back of a growing consumer base and robust mining and infrastructure project pipelines

Table Of Contents

Executive Summary 5
Industry SWOT Analysis ... 6
Peru Real Estate/Construction SWOT... 6
Peru Political Environment and Risk Analysis . 7
Peru Economic Environment and Risk Analysis .. 7
Peru Business Environment SWOT ... 8
Real Estate Industry Overview .. 9
Market Analysis - Office ... 11
Supply And Demand 11
Rents And Yields . 11
Data : Historic Office Rents, from 2010 to 2011 (US$ per m2/month) . 12
Data : Net Office Yields, from 2011 to 2012 ... 12
Data : Terms of Office Rental Contract/Lease, Mid 2011 ... 13

Market Projection Scenario .. 14
Data : Projection Office Rents, 2012 (US$ per m2/month) 14
Data : Projection Net Office Yields, from 2008 to 2016 14
Market Analysis - Retail... 15
Supply And Demand 15
Rents And Yields . 15
Data : Historic Retail Rents, from 2010 to 2011 (US$ per m2/month) . 16
Data : Net Retail Yields, from 2011 to 2012 ... 16
Data : Terms of Retail Rental Contract/Lease, Mid 2011 ... 16

Market Projection Scenario .. 17
Data : Projection Retail Rents, 2012 (US$ per m2/month) 17
Data : Projection Net Retail Yields, from 2008 to 2016 17
Data : Peru Retail Sales Indicators, 2008 -2016 18
Market Analysis - Industrial . 19
Supply And Demand 19
Rents And Yields . 19
Data : Historic Industrial Rents, from 2010 to 2011 (US$ per m2/month) ... 20
Data : Net Industrial Yields, from 2011 to 2012 . 20
Data : Terms of Industrial Rental Contract/Lease, Mid 2011 .. 20

Market Projection Scenario .. 21
Data : Projection Industrial Rents, 2012 (US$ per m2/month) ... 21
Data : Projection Net Industrial Yields, from 2008 to 2016 .. 21
Forecast Scenarios ... 22
Infrastructure Report ... 22
Data : Peru Construction And Infrastructure Market Data and Projections, from 2008 to 2016 22
Data : Peru Construction And Infrastructure Market Long-Term Projections, 2013-2021 .. 23
Construction and Infrastructure Projection Scenario . 25

Macroeconomic Data .. 28
Data : Peru - Economic Activity, from 2011 to 2016 .. 30
Real Estate Risk/Reward Ratings 31
Real Estate/Construction Risk/Reward Ratings ... 31
Peru Real Estate Report Q3 2012
© Business Monitor International Ltd Page 4
Data : Latin America Real Estate Risk/Reward Ratings . 31
Peru’s Business Environment... 31
Data : BMI Business And Operation Risk Ratings .. 31
Institutions .. 32
Data : BMI Legal Framework Rating . 33
Infrastructure .. 34
Data : Labour Force Quality .. 36
Market Orientation . 37
Data : Trade And Investment Ratings . 39
Operational Risk . 40

Competition Overview ... 41
Company Profiles . 43
Abengoa .. 43
Cemento Andino .. 44
Cementos Lima ... 45
Cementos Pacasmayo . 46
Centros Comerciales del Peru (CCPSA) . 48
Cosapi . 49
Graña y Montero (GyM) . 50
Inversiones Centenario ... 52
Negocios e Inmuebles . 53
Demographic Data 54
Data : Peru's Population By Age Group, 1990-2020 ('000) 55
Data : Peru's Population By Age Group, 1990-2020 (% of total) 56
Data : Peru's Key Population Ratios, 1990-2020 ... 57
Data : Peru's Rural And Urban Population, 1990-2020 . 57
BMI Methodology .. 58
How We Generate Our Market Projections . 58
Construction Market . 59
Bank Lending .. 60
Real Estate/Construction Business Environment Rating . 60
Data : Weighting Of Indicators... 61
Sources ... 63

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